The DOJ said Thursday that a federal court entered an $80 million False Claims Act judgment against French bank BNP Paribas for defrauding a taxpayer-funded program designed to encourage American exports.
BNP Paribas submitted false claims for payment guarantees issued by the U.S. Department of Agriculture (USDA) under a program called the Supplier Credit Guarantee Program, DOJ said.
The program provided payment guarantees to U.S.-based exporters for their sales of grain and other agricultural commodities to importers in foreign countries.
The USDA covered losses when import partners failed to make a payment.
U.S. exporters were ineligible to participate if the exporter and foreign importer were under common ownership or control.
The court’s judgment resolves the government’s contention that from 1998 to 2005, BNP Paribas participated in a sustained scheme to defraud the SCG Program by accepting the assignment of credit guarantees from American exporters, even though the American and Mexican importers were under common control at the time.
By April 2005, when the Mexican importers began defaulting on their payment obligations, BNP Paribas submitted claims to the USDA for the losses.
BNP Paribas knew that this made them ineligible for the SCG Program, the DOJ said.
In some cases, the underlying transactions were shams and did not involve any real shipments of grain.
A BNP Paribas vice-president, Jerry Cruz, took bribes from the exporters. He pleaded guilty in January 2012 to conspiracy to commit bank, mail and wire fraud, plus conspiracy to commit money laundering.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.